price war eruption@
* Brent set for biggest weekly fall since 1991 Gulf War
* Virus outbreak means fewer travel, slower business
* Saudi, UAE offer more crude in oversupplied market
* Interactive graphic on pandemic: https://tmsnrt.rs/2GVwIyw (Recasts, updates prices)
NEW YORK, March 13 (Reuters) - Oil prices were on track for their worst week since the 2008 global financial crisis after the coronavirus outbreak rocked the world economy while top exporter Saudi Arabia and its allies stepped up plans to flood the market with record levels of supply.
The rare combination of severe shocks to both supply and demand has caused the crude market to collapse as producers around the world steel themselves for an unexpected glut of oil in coming weeks.
"It's a problem of an oil price war in the middle of a constricting market when the walls are closing in," U.S. energy historian Daniel Yergin said.
World stocks were headed for their worst week since 2008, with the coronavirus sparking panic selling across markets. The virus has infected at least 127,000 and killed 4,700 worldwide, disrupting business, markets and daily life.
Major oil producers were pumping more crude into the market as demand collapses. Saudi Arabia has chartered more than 30 crude supertankers to export oil in coming weeks, specifically targeting big refiners of Russian oil in Europe and Asia, in an escalation of its fight with Moscow for market share.
Goldman Sachs said it now expected a record oil surplus of six million barrels per day (bpd) by April, in a global market that usually consumes about 100 million bpd.
On Friday, prices were higher, rebounding after the United States and other nations signaled plans to support weakening economies. But Brent crude was still set for a drop of 25% on the week, the biggest weekly fall since the 1991 Gulf War. On Friday, Brent rose 70 cents, or 2%, to $33.96 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were on track for a fall of about 20% on the week, their biggest percentage decline since the 2008 financial crisis. WTI was up 40 cents, or 1.2%, to $31.90 a barrel, after earlier gaining to $33.87 a gallon.
Hopes for a U.S. stimulus package that could ease an economic shock from the coronavirus provided some support to the oil and stock markets on Friday.
"There's hope that all the stimulus will stabilize the economy and offset some of the concerns about weaker demand and keep parts of the economy strong enough to support oil prices," said Phil Flynn, analyst at Price Futures Group in Chicago.
Saudi Arabia, the world's largest exporter, and the United Arab Emirates offered more oil to customers after OPEC's talks with Russia and others on supply restraint collapsed last week.
Russia, the world's second-largest producer, has shown no interest in agreeing to further output curbs with the Organization of the Petroleum Exporting Countries.
Russian oil producers met Energy Minister Alexander Novak on Thursday but did not discuss a return to the deal. The head of Gazprom Neft said it planned to hike production in April, following the talks.
A Reuters survey showed analysts slashed their forecasts of Brent crude prices to $42 a barrel on average in 2020, compared with the $60.63 consensus in a February poll.
But the price slump may reduce some supply, by forcing out more costly producers.
Energy companies in the United States, which has surged to become the world's biggest crude producer because of a boom in pricier shale oil, are preparing to cut investment and drilling plans due to plunging prices.
(Additional reporting by Ron Bousso in London, Aaron Sheldrick in Tokyo and Jane Chung in Seoul; Editing by Marguerita Choy, David Evans and Andrea Ricci)